Transactional Fundraising

If you haven’t noticed, the way we pay for stuff has changed.

Go into some establishments and they’re totally cashless. Go to others and they won’t take credit cards, because the fees are out of hand. Shop online and the list of payment options spills down the page.

Non-profits somehow have to keep up in this environment while continuing to make donations frictionless, so that donors have to do little more than think about donating to actually donate.

How can non-profits turn this level of transactional change to their benefit – and what role does direct mail have?

The Shift in Donor Behavior

Not only has the way we pay for stuff changed, but donors behave differently than they did a decade ago.

They expect to give the way they make other payments, with a tap or a wave of their phone or automatically, with no surplus motion whatsoever.

More specifically, this means:

• A preference for digital transactions: Many donors now prefer to give online because it’s how they do things.
• Phone-centric giving: If they can do it on their phone, so much the better.
• Transparency: Once they give, donors expect clear, detailed information about how their contributions are used.

Given these trends, how can sending a letter, having it be opened and read, filling out a form, writing a check, putting it in an envelope, adding a stamp, and putting it in the mailbox hope to compete?

Here’s the good news: It doesn’t have to.

Direct Mail’s Role

All things considered, the new ways are better ways to give. They’re faster. They’re smoother. They require less handwork. They can more easily be set up to be recurring.

Handled properly, modern means of donating can generate more funds for non-profits than the old ways.

Direct mail’s job is to help.

So much of the new payment paradigm is ephemeral. Money is just a number that moves from the donor’s account to the nonprofit’s. A receipt is an email on a phone. A thank-you is an email that can be deleted with a tap.

Direct mail is not that. Direct mail provides a physical touchpoint. It makes the digital transaction real. It can supply concrete proof of how donations are being used.

In a digital world where everything is malleable and mutable, direct mail is tangible.

And it’s that characteristic which non-profits must turn to their advantage in their direct-mail fundraising appeals.

However, if you take that to mean that direct mail should only be used to provide tangible proof while digital channels serve as conduits for fundraising revenue, not so fast.

Direct mail is still a great way for non-profits to raise funds. And digital channels have the ability to tell success stories via video and audio.

The secret sauce comes in when the two maximize their strengths in service of a coordinated campaign. And that may require some changes in the way your non-profit does business.

The database

It’s old news to state that a clean, deep, detailed database can drive effective fundraising through its ability to deliver the personalization vital to digital and direct-mail appeals.

However, it’s fair to ask whether your database is equipped to handle the exigencies of the modern world of multimodal transactions.

If you’re not tracking silent-auction bidders against your database, that’s a problem. If you’re not adding the sponsors of individual fun-runners to your database, that’s a problem.

Non-profit fundraising is messy. There are off-the-cuff cash contributions, checks passed along by third parties (like fun-runners) and digital transactions.

You’re not going to capture the backstory on every $20 slipped into an executive director’s hand. But you have to be diligent and disciplined about recording as many transactions as you can, and committed to getting as complete information as you can on the sources of these funds.

If you can get that into your database, and you put that database into the hands of a skilled direct-mail service provider for segmentation, then you’re onto something.

Until then, it’s going to be more hit-and-miss.

Coordinating storytelling

In non-profit fundraising, very often the best story wins. In multichannel fundraising, the best story told in the most different ways across channels wins.

People relate to stories about living things – most often people, but also pets, birds, and other wildlife. The more relatable and live you make your stories, the better people will understand and react to them.

That means different things across different channels.

On digital channels, words are less important. They’re often harder to read, and many people go to these channels to be entertained by visuals or audio.

On the other hand, people are willing to read stories in direct mail. Great writing in a direct-mail piece that includes a QR code to see great video is going to be a winner. And by having opportunities to give on both the digital and print sides, you’re maximizing your chances of having that winning piece be a winner on the income side as well.

The core message should be the same across all channels, and the stories can be the same. The important thing is that they work together.

CTAs and payments

Okay, but this post is about changes in transactional commerce and how they threaten to upend a nonprofit’s business model. What does that have to do with storytelling?

Whether in the digital realm or in direct mail, your story should conclude with a call to action. That CTA should be to give. And here’s where the upheaval starts.

Your call to give should lead with the giving mechanism that’s easiest for your customers – not you, them.

When you look at successful e-checkouts, they offer multiple ways to pay: multiple credit cards, e-transfer, PayPal, Venmo, Zelle, and so forth. They can be set up to do installments. Autofill is enabled.

This is the sort of experience you have to emulate online. Auto-populate as much as you can. Store payment information and allow it to be retrieved easily. The whole goal is to reduce the number of clicks between the intent to give and the gift.

When you’re outside of the digital realm, the goal is to reproduce that online experience as closely as possible, meaning pre-filled donation forms, QR codes, or personalized URLs that take you to a largely pre-populated giving field.

Does this require more heavy lifting from your database and your CRM? Absolutely. Does it put the onus on your IT team to create a frictionless giving path? Yes. Does that require testing and troubleshooting? Definitely.

Emulation is not easy, but it’s necessary.

Managing Mailing Lists

While you’re tearing up your business by the roots, you may as well repair your mailing lists. Start by removing duplicates, correcting inaccuracies, and updating and validating addresses. Use address-validation software and National Change of Address services to ensure data quality.

Next, examine your segmentation. Is your list segmented …

• Behaviorally? Based on donor behavior, such as past giving patterns, event attendance, preferred giving method, and website interactions?
• Demographically? Based on age, location, gender, marital status, and income level?

You also have to decide whether you want to try to convert your mail donors to online, or send mail to your online donors.

It sounds simple but it’s not. A mail piece to an online donor may be a waste … or not. A QR code sent to a longtime mail donor may be a nothingburger.

It’s not a one-size-fits-all world. It’s not even a 26-sizes-fit-all world. You may wind up with a couple dozen traits that have to be managed, with some level of personalization for each.

Is your mailing list/database prepared for that?

Automation Tools

Along those same lines, are your marketing-automation tools up for that? Can your CRM handle inputs from a mailing with a QR code, digital giving, and checks sent in envelopes? And if your customer journey is set up to deliver thank-you messages after gifts, is the timing the same with each form of giving?

It’s a black eye if a digital gift generates an immediate thank-you but a check in the mail doesn’t produce the same message until weeks have passed.

We just mentioned the term “customer journey.” A lot of the new transaction paradigm ties back to a customer-slash-donor journey. You need to document all the variations of customer journeys – how people discover you, how they interact with you, how they give to you, and how they’re encouraged to give again.

Only by deeply understanding your customer journeys can you effectively manage the messaging and mechanisms necessary to keep the dollars flowing.

Adapting to Economic Changes

And of course, all of this changes all the time.

Economic fluctuations impact donor behavior, and you have to be flexible and responsive to these changes.

It comes back to making things frictionless and having a robust, well-set-up database. If you’re able to take payment however people want to pay in whatever amount, and if your database is able to reflect changing circumstances, you’re in good shape.

If you’re not able to do these things, you’re in … less good shape.

Thinking BNPL

In cases where it seems like economic straits are affecting donations, consider the BNPL model.

BNPL stands for “buy now, pay later.” It was first introduced on a large scale with the site Klarna but has made its way across many e-commerce verticals.

BNPL lets consumers make a purchase and pay for it in pieces, usually four equal payments. There’s no interest and payments can be auto-deducted in many cases.

In the same way that BNPL lets consumers get what they want now and pay for it over time, it lets nonprofit donors get the satisfaction of helping a cause they support and paying for it over time.

You can argue that it’s the same as a recurring donation, and it is on your side of the transaction … but it’s not on the consumer’s side. By adopting the language of BNPL and adapting it to the nonprofit realm you’re speaking in terms consumers understand, making them an offer they’re familiar with.

Engaging Younger Donors

One of the end goals of this exercise is reaching younger donors.

The impression is that young people don’t have money to give to charity. They do, but they’re extremely pragmatic about the donations they make, and their donations come with expectations.

For instance, younger donors are often motivated by social responsibility and environmental sustainability. They want to know your organization’s commitment to sustainability. They’d like you to be carbon-neutral. They can smell greenwashing a mile away.

And if you’re not inclusive, don’t even bother.

So while it’s great if you use recycled materials for your mailings, it’s better if your stories show genuine inclusivity, support community development, and play an active role in environmental conservation.

It’s even better if you do all that and are totally transparent about everything.

Younger donors appreciate direct mail, but they also expect seamless digital experiences. Your social-media posts containing CTAs had better lead to a frictionless donation process.

Oh, and it had better be optimized for a mobile experience, too.

Practical Steps to Take

That’s a lot. It’s a lot to take in and potentially a lot to change. But like any other elephant, you eat it piece-by-piece. That means:

• Reviewing your donor journeys. Make it your obsession to understand how people find you, interact with you, give to you, and do it again.
• Looking at larger trends. Understand how people are buying things, paying for things, and prioritizing what they do with their money. And then figure out how you fit in
• Partnering up. Find a good direct-mail partner who’s an expert at working with databases, segmenting, targeting, and personalizing.
• Remembering that it’s not about you. It’s not about adopting processes that make it easy for you. It’s about making things easy for your donors.

Transactions have changed – and largely for the better. With the right prep, and a boost from direct mail, you can turn those changes to your advantage.

 

By Dan Topel 8/14/24